Businessmodel of Tradeshift

Customer Segments

Tradeshift has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:

• Enterprises: Businesses that need and seek supplies for their operations
• Suppliers: Vendors that offer supplies for businesses and seek customers ### Value Proposition

Tradeshift offers five primary value propositions: price, accessibility, convenience, performance, and brand/status.

The company makes usage of the service free for suppliers, regardless of the size of orders.

The company makes its platform available on phones and tablets, enabling on-the-go access.

The company’s platform includes a dashboard providing real-time information updates, a convenience that facilitates more informed supply chain decisions and quicker financial forecasts.

The company allows users to send documents faster and more efficiently, and helps suppliers receive payments up to five times more quickly.

The company has established a strong brand due to its success. Its platform manages billions of dollars in transactions per month, and the firm saw 250% growth in 2015 alone. It has a number of high-profile clients, including Archer Daniels Midland, KLM, LinkedIn, CBRE Group, and National Health Service. It has also won several prestigious honors. These include the Europas award for “Best Business or Enterprise Startup“ in Europe and The Circulars‘ “Digital Disruptor“ award.

Channels

Tradeshift’s main channel is its direct sales team, through which it acquires most of its customers. The company also promotes its offering through its website, social media pages, and attendance at various conferences and summits.

Customer Relationships

Tradeshift’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a “Support Center” with help guides and answers to common questions. It also provides a “Resource Center” with reports, case studies, videos, and webinars. That said, there is a community component in the form of a forum where customers can connect with each other. There is also a personal service element in the form of phone, e-mail, and live chat support.

Key Activities

Tradeshift’s business model entails maintaining a robust common platform between two parties:  enterprises and suppliers. The platform includes the company’s website and mobile app.

Key Partners

Tradeshift maintains the “Tradeshift Partner Program”, through which it works with like-minded companies to market its products. Through the initiative it offers training on its products as well as sales and marketing support. The program has two main categories:

Distribution Partner – Tradeshift collaborates with individuals and companies to drive joint sales opportunities and revenue. Types of partners include complementary solution providers, consulting firms, referral relationships, and business process outsourcing (BPO) providers.

App Partner – Tradeshift works with developers and technology providers so they can build apps on its open platform that enhance the supplier-buyer relationship.

The Partner Program consists of three levels that provide different levels of training and sales/marketing support:  Gold, Silver, and Bronze. Specific partners range from startups to large organizations, and include Wipro, Quyntess, HP, Amazon, Xerox, PayPal, Deloitte, and HSBC.

Key Resources

Tradeshift’s main resource is its proprietary software platform, which connects its buyer and supplier customers.  It also depends on its human resources in the form of its engineering, sales/marketing, and customer service staff.  Lastly, as a startup it has relied heavily on funding from outside parties, raising $174 million from six investors as of March 2016.

Cost Structure

Tradeshift has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed expense. Other major drivers are in the areas of sales/marketing and customer support/operations.

Revenue Streams

Tradeshift has one revenue stream: the fees it charges to enterprises for use of its platform. The company offers a variety of paid packages, but does not make pricing information public – the sales team must be contacted directly.